A Look at Japan’s WTO Track Record

Since its launch on January 1, 1995, the World Trade Organization has provided a dispute-settlement mechanism that functions in the manner of a tribunal. A country dissatisfied with another country’s trade policies submits a complaint to the WTO and enters into bilateral consultation with the other disputants. If they do not achieve a resolution within 60 days, a dispute resolution panel may be appointed by the Dispute Settlement Body, which is equivalent to a trial court. If either party to the complaint objects to this panel’s ruling, the country may next appeal to an Appellate Body established by the Dispute Settlement Body for that purpose.

In the decades after World War II and before the WTO was founded, Japan reported ever-larger trade surpluses, which brought it alarmed praise for its global business acumen in books like Ezra Vogel’s 1979 Japan as Number One. In the 1980s, Japan experienced seemingly unending conflicts with the United States in trade sectors from automobiles and steel to semiconductors. The Japan-US Structural Impediments Initiative talks, which took place in 1989 and 1990, initiated inquiries into ways of making Japan’s societal structure less forbidding to imports.

The founding of the WTO in 1995, however, established a forum for dispute resolution in international trade. Japan is one of the countries that has actively taken advantage of the opportunity thus provided, filing 26 cases to date. Of these, 21 have reached the tribunal stage, with Japan asserting victorious outcomes in 19 cases, a success rate of 90%.

WTO Cases Instituted by Japan

According to experts in trade policy, one probable factor contributing to the high dispute resolution victory rate on Japan’s part is choosing to file complaints only in disputes that it is likely to win, and win quickly. For example, whereas the EU and Canada have filed complaints with the WTO over the US aluminum and steel tariffs that the Trump administration raised in 2018, citing national security threats, Japan has opted to remain on the sidelines.

Conversely, Japan has been handed defeats in two cases. The most recent such outcome was in April 2019, when an appeals body of the WTO overturned a lower court ruling to uphold South Korea’s ban on Japanese seafood imports from areas near the Fukushima Daiichi meltdown. Additional incidents are rapidly emerging in which Japan may in turn have to confront WTO complaints against it. In one such instance, relations between Japan and South Korea have deteriorated over recent developments in matters pertaining to South Korean conscript labor during World War II. In response, Japan has tightened restrictions on exports to South Korea of essential materials used in semiconductor manufacturing. South Korea is now contemplating whether to file a complaint with the WTO.

(Translated from Japanese. Banner photo: Sekō Hiroshige, minister of economy, trade, and industry, responds to reporters’ questions on July 16, 2019. © Jiji.)